7 U.S.C. § 8789: Storage facility loans

Summary

The Secretary must set up a loan program quickly to help farmers build or upgrade storage and handling for grains, oilseeds, pulse crops, hay, renewable biomass, and other storable commodities (but not sugar). Loans go to producers the Secretary finds have a good credit history, need more storage space, and can repay the loan. Loans can run up to 12 years and the loan principal cannot exceed $500,000. The loan can be paid in one partial draw and one final draw with proper paperwork. Borrowers must give security, such as a lien on the property or other security the Secretary accepts. The Secretary may waive a severance agreement from an earlier lienholder if the borrower increases the down payment by an amount the Secretary sets or provides other acceptable security. The Secretary can allow a smaller subparcel as collateral if it has enough value and no liens or mortgages that are senior to the Commodity Credit Corporation’s lien.

Title 7, §8789

Agriculture, Source: USLM XML via OLRC

(a)In general

As soon as practicable after the date of enactment of this Act, the Secretary shall establish a storage facility loan program to provide funds for producers of grains, oilseeds, pulse crops, hay, renewable biomass, and other storable commodities (other than sugar), as determined by the Secretary, to construct or upgrade storage and handling facilities for the commodities.

(b)Eligible producers

A storage facility loan under this section shall be made available to any producer described in subsection (a) that, as determined by the Secretary—

(1)has a satisfactory credit history;

(2)has a need for increased storage capacity; and

(3)demonstrates an ability to repay the loan.

(c)Term of loans

A storage facility loan under this section shall have a maximum term of 12 years.

(d)Loan amount

The maximum principal amount of a storage facility loan under this section shall be $500,000.

(e)Loan disbursements

The Secretary shall provide for 1 partial disbursement of loan principal and 1 final disbursement of loan principal, as determined to be appropriate and subject to acceptable documentation, to facilitate the purchase and construction of eligible facilities.

(f)Loan security

Approval of a storage facility loan under this section shall—

(1)require the borrower to provide loan security to the Secretary, in the form of—

(A)a lien on the real estate parcel on which the storage facility is located; or

(B)such other security as is acceptable to the Secretary;

(2)under such rules and regulations as the Secretary may prescribe, not require a severance agreement from the holder of any prior lien on the real estate parcel on which the storage facility is located, if the borrower—

(A)agrees to increase the down payment on the storage facility by an amount determined appropriate by the Secretary; or

(B)provides other security acceptable to the Secretary; and

(3)allow a borrower, upon the approval of the Secretary, to define a subparcel of real estate as security for the storage facility loan if the subparcel is—

(A)of adequate size and value to adequately secure the loan; and

(B)not subject to any other liens or mortgages that are superior to the lien interest of the Commodity Credit Corporation.

Notes & Related Subsidiaries

Editorial Notes

References in Text

The date of enactment of this Act, referred to in subsec. (a), is the date of enactment of Pub. L. 110–246, which was approved June 18, 2008. Codification Pub. L. 110–234 and Pub. L. 110–246 enacted identical sections. Pub. L. 110–234 was repealed by section 4(a) of Pub. L. 110–246.

Statutory Notes and Related Subsidiaries

Effective Date

Enactment of this section and repeal of Pub. L. 110–234 by Pub. L. 110–246 effective May 22, 2008, the date of enactment of Pub. L. 110–234, see section 4 of Pub. L. 110–246, set out as a note under section 8701 of this title.

§8789 Storage Facility Loans